Part of our role in delivering responsible property management in Hitchin and across Hertfordshire is tracking forthcoming legislative changes that could impact our landlords or tenants.
The forthcoming Minimum Energy Performance Bill is one we’re keeping a particularly close eye on. This hasn’t passed into law yet, but a second parliamentary reading of the bill took place in April 2023 – and it brought some (relatively) positive news!
The bill proposed an extended deadline for UK landlords to achieve a minimum Band C Energy Performance Certificate (EPC) for all rental properties by 31 December 2028.
As the bill progresses through parliament, there’s further potential for change … but here’s what we currently know.
- You have more time.
Whilst many landlords will not welcome the cost of delivering energy-efficient home improvements – especially to older rental stock – the 2028 deadline announced last month was relatively good news! Earlier legislation proposed a deadline of 2025, so the revised 2028 date for achieving Band C does take a little pressure off.
- All tenancies will be impacted.
The bill will apply to existing and new tenancies from 31 December 2028. So, if you have any rental properties that are currently lower than Band C, this new bill will impact you once it becomes law.
- The devil will be in the detail.
There are some grey areas in the current draft of the legislation. For example, the bill currently states landlords must achieve a Band C rating where it’s: ‘practical, cost-effective and affordable’. Certain landlords, for example, those with multiple older properties – might argue that delivering the required changes is ‘none of the above’.
As the Minimum Energy Performance Bill progresses into law, we’ll need to see clearer guidance on what is deemed practical, cost-effective, or affordable – and of course, we’ll share this with our landlords once it is clearer.
Why do EPCs matter?
EPC ratings show how energy efficient a property is. All rental properties are already legally required to have a valid EPC certificate at the outset of a tenancy. The EPC rating enables potential renters to gain a good idea of what they can expect their energy costs to be, and it’s calculated using:
- The amount of energy used per m²
- The level of carbon dioxide emissions (tonnes per year)
The rating is awarded by a qualified assessor on a scale of A to G. The top energy performance rating is ‘A’, which represents an efficiency rating score of 92-100. The calculation combines and balances a range of elements – for example, you might rate A for insulation but a G for heating efficiency – giving an overall rating of around C or D.
In setting the requirement for rental properties at Band C, the Government wants your property to score between 69-100.
At present, the average EPC rating for UK homes is Band D, with older properties likely to have lower ratings of around D or E. Home improvements that can help a property achieve Band C or above include:
- Adding loft or cavity wall insulation
- Upgrading to LED light bulbs
- Investing in double/triple-glazed windows/doors
- Upgrading the boiler
- Installing solar panels
What do I need to do?
EPCs are valid for 10 years, so if you already have a recently issued certificate at Band A to C, you can relax.
If your property is in a lower EPC band, it may be worth exploring potential actions that would be required to achieve Band C and the associated costs. At least you can have a strategy in place for when the bill passes into law, so you won’t be caught by surprise. Of course, we’ll keep you posted on any further changes!
M A S O N S is a leading letting agent in Hitchin, covering rental and buy-to-let properties in Hertfordshire. Founded on award-winning lettings experience, we specialise in property management, buy-to-let in Hitchin, and residential lettings – so if you have any concerns about these forthcoming changes, drop us a line at 01462 557 477 or [email protected]
Please note: this article should not be interpreted as legal or financial advice.